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The Quorum Report, an Austin-based subscription political newsletter, has reported that Speaker Tom Craddick (R-Midland) has been speaking to groups across the state about the upcoming legislative session.

On a positive note, Speaker Craddick is estimating a significant budget surplus going into the session; even after taking into account increases in demands on existing programs, the figures distributed by the speaker predict that well over $5 billion of unallocated revenue could be available when the Legislature convenes in January.

However, Craddick’s printed remarks forecast some issues of concern. TCTA will be watching these issues very closely as the session progresses and will continue to keep our members apprised of major developments. The speaker's remarks and TCTA's responses follow:

Craddick: “The Teachers Retirement and Employees Retirement System are not actuarially sound, and as a result, retired teachers and state employees are not eligible for cost-of-living adjustments in their pensions.”

  • TCTA: TCTA agrees with TRS Executive Director Ronnie Jung that TRS is not actuarially unsound, though it is currently underfunded. The system is not in danger of being unable to pay retirement annuities. However, the current funding period for TRS prevents benefit enhancements for current retirees, except in the form of a 13th check or an increased state contribution to health insurance costs for TRS-Care.

Craddick: “….We will look at addressing changes in retirement policies, modifications in contribution rates paid in by teachers and state employees, or providing additional revenue to these pension funds.”

  • TCTA: Although an increase in retiree annuities is a top priority for TCTA this session, we will oppose any attempt to further decrease retirement benefits for active members or to increase active member contributions. Many legislators are discussing the possibility of an increase in the state’s contribution to TRS (currently active members pay in 6.4% of payroll, the state contributes the constitutional minimum of 6%), and TCTA fully supports this approach to improving the TRS fund’s fiscal health.

Craddick: “Teachers, state employees and retirees continue to request salary adjustments, as inflation rises. As a result, we will continue to consider options, such as innovative compensation policies related to merit pay, incentives and one-time bonuses.”

  • TCTA: Texas teachers appreciate the $2,000 pay raise provided in the third special session last spring, but TCTA will be pursuing an additional across-the-board salary increase, an extension of the salary schedule or other proposals to provide more salary growth for veteran teachers, stipends for mentor teachers, and appropriate compensation for paraprofessionals. TCTA would oppose further increases based on performance.

Craddick: “We will also be looking at the rise in health care costs, hoping to find ways to make it more affordable to state employees.”

  • TCTA: We agree that the rise in health care costs is of great concern to public employees, and TCTA will work to ensure that legislators include school employees in their efforts to improve health insurance affordability.

TCTA testified before the Senate State Affairs Committee earlier this month, reminding the committee that the legislature’s reduction of the TRS contribution rate to 6% in the 1990’s was considered temporary at the time and should be restored to a higher rate now that the system needs the revenue. We also testified in favor of repealing changes made last regular session that will have a negative impact on current employees’ retirement benefits. TCTA will continue to pursue these goals in the 2007 legislative session.